Art market VAT: the reduced rate of 5.5%

Since 1 January 2025, works of art have been subject to the reduced VAT rate of 5.5%. Article 278-0 bis of the French Tax Code, as amended by the Finance Act for 2025, applies this rate to supplies of works of art made in France. Their imports and intra-Community acquisitions are subject to the same rate, as article 278-0 B of the French Tax Code aligns these transactions with the rate applicable to supplies of the same goods. The previous regime, which combined several rates depending on the nature of the transaction and the status of the seller, is thus replaced by a single rate of 5.5%.

The 5.5% rate covers three categories of transactions involving works of art: supplies made in France, whoever the seller may be, imports from non-EU countries, and intra-Community acquisitions from another Member State of the European Union. The rate for supplies is set by article 278-0 bis of the French Tax Code, with imports and intra-Community acquisitions aligned by article 278-0 B of the French Tax Code. This generalisation replaces the patchwork of rates that previously distinguished according to whether the work was imported, sold by the artist or resold by a professional.

The concept of a work of art for VAT purposes is defined by article 98 A of annex III to the French Tax Code. That provision sets out an exhaustive list of the goods concerned, notably pictures, paintings, drawings and collages executed entirely by hand, original engravings, prints and lithographs produced in limited numbers, original works of statuary art or sculpture, hand-made tapestries and wall textiles, unique ceramic pieces, enamels on copper and certain photographs taken and printed by the artist under limited-edition conditions. Whether the goods fall within this list determines the application of the 5.5% rate.

Yes. The margin scheme under article 297 A of the French Tax Code remains applicable to resales of works of art acquired from a person who did not charge VAT, in practice a private individual, a taxable dealer itself applying the margin scheme, or a person benefiting from an exemption threshold. The taxable base is then the difference between the sale price and the purchase price. This regime retains its interest where the work was acquired without any deductible input VAT.

No. A supply whose taxable base is determined under article 297 A of the French Tax Code, that is, under the margin scheme, does not qualify for the reduced rate of 5.5%. VAT is charged on the margin alone, at the rate applicable to the transaction. The 5.5% rate under article 278-0 bis applies to supplies taxed on the full price. A clear distinction must therefore be drawn between the two regimes: taxation on the full price at 5.5% on the one hand, and VAT on the margin on the other.

No. Article 297 B of the French Tax Code, which allowed a taxable dealer to elect for the margin scheme on supplies of works acquired at the reduced rate, for example on importation or from the artist, was repealed with effect from 1 January 2025. Where a work has been acquired at the reduced rate, its resale is now taxed on the full price at the 5.5% rate, with no possibility of using the margin scheme. The choice between the two regimes is therefore made at the time of acquisition, and no longer at the time of resale.

The decision depends primarily on the origin of the work and on whether or not deductible input VAT is available. Where the work is acquired with VAT (importation, purchase from the artist, intra-Community acquisition), its resale is taxed on the full price at the 5.5% rate, with a right to deduct. Where it is acquired without VAT, notably from a private individual, the margin scheme under article 297 A may prove more favourable. The firm maps purchase flows in order to determine, as soon as the work is acquired, the regime most consistent with the price, the deduction position and the client base.